Jersey firms fined for breaching financial crime measures

Money Laundering, Regulatory Finesgracechurchfcp

Three banking firms have been fined more than £700,000 for breaching anti-money laundering regulations.

A Jersey Financial Services Commission (JFSC) investigation found the SGKH entities had failed to show “adequate risk management systems in place”.

It included missing minutes from board meetings and a failure to notify the JFSC when rules were breached.

The commission said it intended the fines to act as “a deterrent for all regulated businesses”.

SGKH Bank, SGKH Trust and SGKH Corporate provide wealth management services from Jersey and form a sub-group of the UK regulated SG Kleinwort Hambros Bank.

Between 1 January 2018 and May 2019, the JFSC found insufficient resources had been allocated by the entities to ensure it was complying with anti-money laundering and counter-terrorism measures, which led to “high priority actions” being delayed.

The assessment also uncovered “insufficient detail” had been recorded in board meetings where “significant matters” should have been discussed, including how the business was monitoring its activity.

While there was no evidence the three firms facilitated financial crime, the JFSC said: “Consequently, the SGKH Entities’ conduct increased the risk of failing to identify financial crime, which is of concern given such activity can undermine the integrity and stability of Jersey’s financial services industry.”

The firms were fined the following sums as a result:

  • SGKH Bank – £510,599.67
  • SGKH Trust – £155,476.54
  • SGKH Corporate – £53,375

Director general of the JFSC Martin Moloney said: “This is the third time the JFSC has used its powers to fine businesses in Jersey’s financial services industry for breaching regulatory requirements.

“The three SG Kleinwort Hambros firms acknowledged their failings at an early stage and have taken steps to make material changes to strengthen their governance arrangements and compliance systems and controls.

“We do not use this sanction lightly and intend it to be a deterrent for all regulated businesses.”

Article credit: https://www.bbc.co.uk/news/world-europe-jersey-56094557